BRAZIL AND THE CRISIS OF THE LIBERAL WORLD ORDER / THE FINANCIAL TIMES COMMENT & ANALYSIS

Brazil and the crisis of the liberal world order

Polarised politics and the rise of nationalism echo Trump’s US and Brexit Britain

by: Gideon Rachman




Fernando Henrique Cardoso has seen the bad times, the boom times, and now the crisis. As president of Brazil from 1995 to 2002, he consolidated the country’s democracy and reformed its economy. In the following decade the surge in Brazil’s fortunes caught the world’s attention, and the country was awarded both the World Cup and the Olympics.

But sitting in his office in São Paulo last week, Mr Cardoso, now 86, calmly acknowledged that Brazil faces “a moral and economic crisis”. The economy shrank by almost 8 per cent in 2015 and 2016. President Dilma Rousseff was impeached and removed from office last year. The current president, Michel Temer, and some 40 per cent of the members of Congress are under investigation over corruption.

This Brazilian crisis has global implications. In the good times, the country became a symbol of the triumph of liberal politics and economics around the world. In the bad times, however, Brazil’s plight has become a symptom of a global crisis in the liberal order.

By cutting subsidies, controlling inflation, pursuing privatisation and opening the economy up to competition, Mr Cardoso laid the foundations for a long economic expansion. His successor as president, Luiz Inácio da Silva, known as “Lula”, was a leftist who built on the liberal reforms that he had inherited. In the Lula era, Brazil’s notorious inequality was attacked through social programmes that attracted global praise.

As a country with a population of 207m — roughly half of South America — Brazil became an informal spokesman for the continent and an emerging world order. Through the Brics group of Brazil, Russia, India, China and South Africa, Brazil pushed for a global rebalancing of power, in a way that seemed both overdue and unthreatening. Former US president Barack Obama publicly embraced Lula, saying: “I love this guy.”

But this year, Lula was convicted of corruption, and may now be barred from seeking re-election in next year’s presidential poll. His downfall is a symbol of the disappointed hopes of many poorer Brazilians. With the economy in crisis, inequality rising again, and the “car wash” corruption scandal in full flow, the Brazilian political class is widely despised. Voters are increasingly cynical and deeply polarised.

In a pattern now familiar in the US and Europe, populist politicians are using the crisis to move into the mainstream. An early opinion poll for the 2018 presidential election show Jair Bolsonaro, a far-right nationalist, in second place behind Lula. Mr Bolsonaro, a former military officer, has a political style that makes Donald Trump seem gentle. He dedicated his vote to impeach the president to Colonel Brilhante Ustra, who ran a squad that tortured Ms Rousseff when she was a political prisoner during Brazil’s military dictatorship.

Like Rodrigo Duterte, the wild-man president of the Philippines, Mr Bolsonaro is building his popularity by promising to get tough on crime. The fact that Rio de Janeiro is in the grip of a violent crime wave make his appeals for a restoration of “order” widely popular. In Brazil last week, most pundits saw Mr Bolsonaro as too extreme to win. But the reassurances I received in well-appointed offices reminded me uncomfortably of conversations in Washington in 2015, when a Trump victory was deemed inconceivable.

Whether Mr Bolsonaro wins or not, his emergence as a serious political figure is a sign of the bitter polarisation of Brazilian politics. Many on the left argue that both Lula and Dilma are victims of an illegitimate coup by a rightwing establishment. The conservative response is that their Workers’ party built its power on corruption, patronage and wasteful spending, which dragged the economy down. The invective on both sides is strongly reminiscent of the partisanship gripping Trump’s America and Brexit Britain.

Brazil’s crisis has its own internal causes and logic. But it also fits a global pattern. Mr Cardoso’s reforms took place in an era when liberal economic and political ideas were in the ascendancy around the world. He became president six years after the fall of the Berlin Wall and 10 years after the end of military rule in Brazil. Other developing and middle-income countries, such as China, India, Mexico and Poland, were also following the path of liberal, economic reform. And Bill Clinton, a proud “globalist”, was in the White House.

But the financial crisis of 2008 sparked a backlash against “neoliberalism”. The current US president now denounces globalism and preaches protectionism. Nationalist strongmen are in power in Beijing, Delhi, Moscow and Ankara. Mr Cardoso, a multilingual professor, belongs to a different era when technocrats and academics were in charge.

And yet Brazilian liberals are far from ready to admit defeat. The corruption scandal has turned politics upside down, but many hope it will be the basis for a more just and efficient Brazil. The depth of the current economic crisis may also force Brazil to return to the path of economic reform, with a renewed attack on subsidies and clientelism. And Mr Cardoso is adamant that the political progress of the previous decades will endure. In the past, he says, “Brazilians all knew the names of the top generals . . . But now everybody knows the names of the judges and prosecutors. That’s progress.”